Tag: liability insurance

30Jul

Hong Kong Small Business Insurance 101: Your Go-To Guide

If you’re a small business owner in Hong Kong, you understand the dedication and hard work it takes to build and sustain your enterprise. Protecting your business against unforeseen risks is just as important as nurturing its growth. This article serves as your comprehensive guide to small business insurance, offering insights tailored to the Hong Kong market.

Understanding Small Business Insurance

Small business insurance is a safeguard that helps protect your company from various risks and liabilities. It provides financial assistance in case of unexpected events that could otherwise lead to substantial losses. In Hong Kong’s dynamic business environment, having the right insurance coverage is crucial for your peace of mind and business sustainability.

Common Types of Small Business Insurance in Hong Kong

  1. Property Insurance: This coverage safeguards your physical assets, such as your business premises, inventory, equipment, and furnishings. In case of events like fire, natural disasters, or theft, property insurance helps you recover financially.
  2. Liability Insurance: Liability coverage shields your business from legal claims arising from injuries, property damage, or accidents that occur on your premises. It also extends to product liability, protecting you if a product you sell causes harm to customers.
  3. Cyber Insurance: Also known as cyber insurance, is a type of insurance coverage designed to protect businesses from the financial losses and liabilities associated with cyber-related incidents. These incidents can include data breaches, hacking attacks, ransomware, malware infections, and other forms of cybercrime.
  4. Business Interruption Insurance: If your business operations are disrupted due to unforeseen events, such as a fire or natural disaster, business interruption insurance covers the loss of income and ongoing expenses during the downtime.
  5. Workers’ Compensation Insurance: If you have employees, workers’ compensation insurance is mandatory in Hong Kong. It covers medical expenses and lost wages if an employee gets injured or becomes ill due to work-related activities.
  6. Professional Indemnity Insurance: Especially relevant for service-based businesses, this insurance protects against claims of professional negligence or errors that lead to financial losses for clients.

Customizing Coverage for Your Business

Every business is unique, so your insurance needs may vary. When choosing coverage, consider factors like your industry, size, location, and the nature of your operations. Consulting with an insurance professional who understands the Hong Kong market can help you identify the right coverage to protect your specific business risks.

Affordability and Coverage Balancing Act

While securing your business is essential, managing costs is also crucial. Premiums for small business insurance in Hong Kong vary based on factors like coverage limits, deductibles, and the type of business. It’s a balancing act between having adequate coverage and maintaining affordability.

Navigating the Insurance Landscape in Hong Kong

Hong Kong’s insurance industry is well-regulated and offers a variety of insurance providers and brokers. Before purchasing a policy, thoroughly research the reputation and credibility of the insurance company. Check if they have experience serving businesses like yours and evaluate their claim settlement process.

Partnering with an Insurance Professional

Navigating the nuances of small business insurance can be complex, especially in a bustling city like Hong Kong. Engaging with an experienced insurance professional can be immensely helpful. They can assess your business risks, recommend appropriate coverage, and guide you through the policy selection process.

Small business insurance is a strategic investment that protects your hard work and dedication from unforeseen challenges. As a business owner in Hong Kong, it’s your responsibility to understand the insurance options available and choose the coverage that aligns with your business goals and risk tolerance. By securing your business with the right insurance, you’re building a solid foundation for its continued success.

13Nov

Four Cybersecurity Outlook for Small and Medium Businesses in 2023

In the post-COVID-19 era, the market for cybersecurity insurance is anticipated to grow from US$ 11.9 billion in 2022 to US$ 29.2 billion by 2027, at a CAGR of 19.6%.

Cyber insurance will be bought by more SMBs than ever. Industry research found that only 15% of SMBs had purchased some form of cyber insurance, even though cybercrime was one of their top concerns. This means that for the foreseeable future, cyber insurance represents the single biggest growth opportunity for carriers, brokers, and MGAs.

According to a recent survey by Inc.com, which found that there are more than 30 million small top midscale businesses in the US alone, 77% of these companies believe that adopting technology throughout their company is a key factor in their growth.

Cyber insurance will be a part of every organization that depends on digital technology currently or in the future.

Here are four outlooks for cybersecurity in 2023:

1. Insurance companies will factor in a company’s existing (or non-existing) cyber security measures.

For carriers and policyholders that lack an active risk management system for these risks, the cost of mitigating and insuring data breaches and other cyber catastrophes will keep rising. For small and medium-sized firms, a cyber event often costs insurance more than US$150,000.

The average cost of a cyber incident for large businesses is around US$10 million. Carriers will demand more security from businesses to buy insurance to reduce those expenses and keep a successful book of business.

We predict that, at the very least, policies with limits of more than $500,000 will need to have anti-virus, firewall, two-factor authentication, backup, and encryption.

2. Companies that’ve already experienced data breaches will have a harder time finding a cyber insurance provider.

According to a recent report by the Government Accountability Office  (gao.gov), the increasing threat of a cyber breach will drive an upsurge in cyber insurance premiums while reducing availability.

In 2020, 47% more buyers chose cyber coverage, up from 26% in 2016. The cost of cyberattacks roughly doubled for American insurance companies between 2016 and 2019. And as a result, there was a significant rise in insurance prices. Due to the current shortage of insurance capacity in the market and the fact that many firms are unable to obtain cyber insurance at an acceptable price, costs are likely to increase.

3. Costs are projected to rise as a result of the market’s existing lack of insurance capacity and the fact that many businesses cannot find cyber insurance at a competitive price.

Brokerages must now be ready to discuss a packaged approach: a pre-placement cyber risk report, a competitive cyber insurance policy, and a platform that continuously monitors exposures throughout the policy’s lifetime and notifies the insured before a breach occurs. This will help clients avoid a price spike following a breach and a claim.

This strategy may lessen the need for some coverage restrictions or exclusions while preventing premium increases.

4. The adoption of AI-powered automated underwriting for cyber policies will keep expanding.

Providers can help their clients in getting the coverage they require, lower the chance of a breach, and prevent premium increases when carriers and MGAs use tested automated underwriting supported by tested technology. In order to provide the SMB market sector with a cyber insurance policy, automated data-driven solutions are essential.

If your business needs help finding the right cyber insurance, get in touch with us at Village Insurance Direct.

17Jul

The increased risks for directors and officers Post-COVID

Since the outbreak of Covid-19, directors and officers of companies have faced increased risks and liabilities. These risks include potential litigation from shareholders, employees, and customers, as well as investigations and regulatory actions.

 

 

To protect themselves from these risks, directors and officers need to purchase D&O insurance. D&O insurance will help to cover the costs of legal fees and any damages that may be awarded.

With the remote work environment and the increase in cyber-attacks, there is an increased risk of data breaches. Directors and officers need to be aware of these risks and take steps to protect the company’s data. One way to do this is to purchase cyber insurance. Cyber insurance will help to cover the costs of a data breach, including the costs of investigation, notification, and data recovery.

CASE STUDIES

One case study about D&O insurance during the pandemic is about a company named Blink. Blink is a smart home security company and their D&O insurance policy covered them when an employee made false statements about the company on social media. Litigation cost Blink the amount of $2.5 million and their D&O insurance policy covered $1.5 million of that.

Had the company not had the proper insurance coverages in place, they would have had to pay for the legal fees and damages out of their own pocket, which could have been detrimental to the company.

Another notable case of D&O insurance companies can learn from is the case of Hertz which filed for bankruptcy. During the bankruptcy process, it was revealed that the company did not have enough D&O insurance to cover all the potential claims that could be brought against the company. This led to the company having to purchase additional insurance to cover the potential risks.

If companies do not have enough D&O insurance, they may be left exposed to potential risks that could lead to financial ruin. It is important for companies to have the proper amount of D&O insurance in place to protect themselves from these risks.

 

 

The cost of D&O insurance in Asia post-pandemic is estimated at $600 million, which is a 50% increase from 2019. The rise in cost is due to the increased number of D&O claims being filed, as well as the increased amount of coverage that is needed.

Now more than ever, it is important for companies to have the proper insurance coverages in place. D&O insurance can help to protect the company from the increased risks that they are facing. Cyber insurance can help to protect the company from the increased risk of data breaches. companies should purchase the proper insurance coverages to protect themselves from the risks that they are facing.

9Jul

Tips for Businesses: Adapting to a Hybrid Way of Working

A lot of businesses have shifted to hybrid work with part of the week spent in the office and the other days spent with employees working remotely. It can be tough to keep everyone on the same page and to keep company processes streamlined.

Here are a few tips on how businesses can adapt to a hybrid working environment:

 

1. Schedule regular check-ins: Have weekly or biweekly check-ins with employees, either individually or in small groups. This is a time to touch base and see how everyone is doing both professionally and personally.

2. Set clear expectations: When it comes to hybrid work, it’s important to set clear expectations from the start. Employees should know when they are expected to be in the office and when they are expected to work from home.

3. Encourage communication: In a hybrid work environment, there will inevitably be more communication via email, chat, and video conferencing. Encourage employees to over-communicate, rather than under-communicate. Create a hybrid work policy: A hybrid work policy should spell out the dos and don’ts of hybrid work. This will help to set clear expectations and avoid any confusion down the road. Invest in the right technology: In order for hybrid work to be successful, businesses need to

4. Be flexible: One of the benefits of hybrid work is that it allows for more flexibility. Employees may need to take a break in the middle of the day to pick up their kids from school or take a walk to clear their heads. As long as they are getting their work done, be flexible with their schedule.

5. Set clear expectations and then let them work independently: Trust is key for this type of arrangement to be successful. If there are any misunderstandings, they can quickly snowball into big problems. If you micromanage them, it will only lead to frustration on both sides. If productivity has not dwindled, then you have nothing to worry about.

6. Invest in the right technology: In order for hybrid work to be successful, businesses need to invest in the right technology. This includes video conferencing software, project management software, and file-sharing platforms.

With technology, comes liabilities

Once your company has invested in the right technology, cybersecurity needs to be part of the package. Securing sensitive data, especially if you’re handling 3rd-party information needs to be a priority.

This can include investing in a good VPN, data encryption, and 2-factor authentication.

Create a remote work policy:

Much like your company’s regular attendance policy, hybrid work needs its own set of guidelines. This can help to prevent any misunderstandings about what is expected from employees. The policy should cover topics such as personal usage of devices, productivity trackers, etc.

Training employees about cybersecurity is also encouraged because your IT department is only as good as employees who understand the value of security protocols.

Regularly Back Up Data:

Backing up data is an essential part of any business’ cybersecurity strategy, but it’s even more important for hybrid businesses. This is because hybrid businesses often have employees working from different locations, which makes it more difficult to physically secure data.

Get Liability Insurance That Covers Cyber Security Breaches

This is one of the most important steps a company can take to protect itself against hybrid work-related risks. Cyber insurance can help cover the costs of data breaches, cyber extortion, and other risks that come with hybrid working.

Hybrid work can be a great way for businesses to adapt to the changing world. By being flexible with employees, investing in the right technology, and setting clear expectations, businesses can make hybrid work a success.

21Sep

Why Landlords Should Make Renter’s Insurance Mandatory

Leasing out one’s property to tenants has its drawbacks but considering the demand (and returns) for apartments in Hong Kong, the trouble is often worth the minor trouble.

One can never truly know how a tenant will take care of your property once the contract is signed which why making renter’s insurance mandatory can spare you plenty of time and money if problems arise.

Adding renter’s insurance to your lease agreement can increase the cover on your property and lower operational costs long term. Think of it as another line of defence when there’s an emergency.

WHAT CAN RENTER’S INSURANCE DO FOR LANDLORDS AND TENANTS?

Having renter’s insurance helps reduce repair costs in case of fire and other damages due to accidents. It also keeps your own insurance premium low by reducing the claims on the policy.

Knowing that accidents leading to damage to your apartment are covered can also help quickly resolve disputes between landlord and tenant. Blaming the other party is a very common result of property damage and having insurance that relieves the anxiety of losing money saves everyone from unnecessary conflict.

What does renters insurance cover - Village Insurance Direct

In addition to reimbursement of lost items, some renter’s insurance policies may even cover temporary living expenses when there’s a need to vacate the space during repairs.

More importantly, with renters insurance, tenants are less likely to pursue legal actions against you.

It’s a win-win for both.

OTHER SELLING POINTS OF RENTER’S INSURANCE:

1. It’s affordable. One can get insurance for as low as HK$38 a month. Village Insurance can help expats find the best and cheapest policies in Hong Kong.

2. It can cover expensive stuff owned by the tenant like computers, sports equipment, furniture, and more. It’s important to note that a tenant’s personal items won’t be covered by the landlord’s property insurance during a fire or if their laptop is stolen, just because they are not the owner of the apartment.

3. Renter’s insurance can include legal fees and medical payments in case someone (e.g. a guest) claims to have been injured because of the tenant’s actions or negligence.

4. Better landlord-tenant relationships are built when the right insurance policies are in place. With fewer worries, both parties are more likely to stay within the agreement for a longer time.

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Get in touch with us to find personal and business insurance for expats living in Hong Kong.

 

 

7Sep

COVID-19 Common Liability Concerns for Businesses

While the vaccine rollout in Hong Kong is ongoing, COVID-19 still raises several liability concerns for customers or employees who may become sick due to alleged negligence by an organization.

For these types of concerns, it’s necessary to take the following insurance considerations into account:

– Commercial liability insurance— protects your business from financial loss should you be found liable for personal harm (like a customer getting sick) caused by your product or services, or due to business operations in the case of employees. This general liability insurance can cover costs correlated with bodily injuries, damage to third-party property, personal injuries, medical expenses, litigation and more.

In the time of COVID, commercial liability insurance should provide coverage and allow organizations to defend claims. For a claim to be valid, the claimant would have to claim that the virus was contracted due to the organization’s or business’ oversight and detail how, when and where they got sick—all of which may be difficult to prove.

– Directors and officers (D&O) insurance— Shareholders can sue a business in case there’s a failure to respond competently to COVID-19 concerns. Specifically, shareholders may dispute that Directors and Officers failed to plan for adequate contingency plans or detail how the pandemic could affect the company’s finances.

Here’s a recent blog we published with examples of D&O Claims.

It should be noted that most D&O insurance excludes cover for bodily harm but may offer some protection depending on specific accusations. That said, it’s important for businesses to examine the scope of their D&O insurance to verify that they are covered in the event of such events.

EMPLOYEE’S COMPENSATION INSURANCE

In events when an employee makes a claim that they contracted COVID-19 at work, a number of employee compensation factors come into play. For workplace illnesses, most policies only pay out benefits if the disease in question is occupational in nature. This may imply that communicable diseases are generally excluded from most employee compensation policies.

However, a policy may be triggered if the illness came about during the course of employment. Generally, these scenarios are reviewed on a case-by-case basis but could include instances for:

> Healthcare workers who contract COVID-19 at the hospital where they work.

> An airline employee contracts COVID-19 from a passenger.

> A hospitality employee gets COVID-19 that can be linked to a large event at their place of work.

Poor insurance cover or the lack of any type of cover that specifically addresses your business’ liability with COVID will deter you from making meaningful recovery this year. Although there is some positive outlook on financial recovery in Asia, this should not be the time to loosen one’s sense of cautiousness.

Need to update your company’s liability insurance? Get in touch with us today.